As we near the end of 2019, we're seeing global markets heat up amid growing international geopolitical tensions.
Whether it's the US–China trade war, a 'hard Brexit' or central bank rate cuts, it feels as though much of the outlook for global markets is all doom-and-gloom for the months ahead.
So, if you're looking to position your portfolio for an impending recession in 2020, I've taken a look at 2 stocks which could help you ride out the storm and protect your portfolio's downside next year.
1. AGL Energy Ltd (ASX: AGL)
When times are tough, it's historically been a good idea to invest in defensive or countercyclical sectors such as energy.
I personally wouldn't be cashing out and going all-in on ASX gold stocks in 2020, as that would potentially cut off much of the upside if a recession doesn't come our way.
With AGL, you can invest in a large-cap, ASX 50 energy stock that has a strong track record and solid outlook going forward.
Regardless of whether we're in a recession or not, people still need electricity and gas in their homes and this leaves AGL well-placed to protect its earnings (and dividends) in the event of a downturn.
Adding to this, AGL is in a position to capitalise on the renewable energy boom in coming years while eastern Australia gas prices remain elevated despite the best attempts of the Federal Government.
Overall, AGL looks like a good option to ride out a storm in 2020 and still pick up a handy 6.27% per annum dividend yield along the way.
2. Woolworths Group Ltd (ASX: WOW)
Woolworths operates within the Consumer Staples sector, and in a similar vein of logic to AGL, even in a recession, people still need groceries.
The Woolworths share price has climbed 26.62% higher in 2019 largely due to stable earnings and key divestments such as its petrol business sale earlier in the year.
Fellow supermarket rival Coles Group Ltd (ASX: COL) posted a messy first full-year result since separating from Wesfarmers Ltd (ASX: WES) in late 2018, and I think the maturity of Woolworths' operations makes it a better buy at this stage.
Woolworths is currently yielding 2.76% per annum, meaning there is the potential to earn dividend income and some capital gains in 2020 even if we see a broader market correction.
With a market cap of $46.46 billion, I think Woolworths could represent a safe haven of sorts within the ASX 50 for those wanting to keep their hard-earned cash outside of volatile or cyclical sectors.
